80410 SÃO TOMÉ AND PRINCIPE MACRO-FISCAL CONTEXT AND HEALTH FINANCING FACTSHEET Macro-Fiscal Context and Health Financing Factsheets provide graphical representations of 14 key indicators linked to the larger macro fiscal environment in which a health system operates. These factsheets are produced by a task team consisting of Rafael Cortez (Task Team Leader, Sr. Economist, HDNHE), Aaka Pande (Young Professional, Health Specialist, MNSHH), Patrick Eozenou (Young Professional, Economist, HDNHE), Adam Leive (Consultant), Marc Smitz (Consultant), and Ece Ozcelik (Consultant), under the overall supervision of Armin Fidler (Acting Sector Manager, HDNHE) and Nicole Klingen (Acting Director, HDNHE). The task team is grateful for inputs from Jack Langenbrunner, Ajay Tandon, Robert Gilingham, George Schieber, Edit Velenyi, and Cheryl Cashin. Recommended Citation: Pande, A, Leive A, Smitz M, Eozenou P and E Ozcelik. Macro fiscal context and health financing fact sheet. World Bank: Washington DC, 2013. For inquiries, please contact: Aaka Pande:apande@worldbank.org, Ece Ozcelik: eozcelik@worldbank.org, and Emiliana Gunawan: egunawan@worldbank.org São Tomé and Principe Macro-Fiscal Context and Health Financing Factsheet 1A. Health Financing Indicators, 1995-2010 GNI per capita: 1.4e+03 14 60 Population: 1.7e+05 2A. Health Financing Indicators, 2010 60 12 50 10 40 % % 40 % 30 8 20 20 6 1995 2000 2005 2010 0 Year Tot. Health Exp. (% GDP) Govt. (% THE) Govt. (% GGS) OOP (% THE) Tot. Health Exp. (% GDP) Govt. (% THE) São Tomé and Principe [left] [right] Average in LMICs Govt. (% GGS) OOP (% THE) [left] [right] Average in AFR 1B. Macroeconomic Fiscal Indicators, 1995-2017 2B. Macroeconomic Indicators, Average 2012-2017 (proj.) 50 80 20 40 15 60 30 % GDP % GDP % 10 40 20 5 20 10 0 Growth Unemployment Inflation 0 0 1995 2000 2005 2010 2015 São Tomé and Principe Year Average in LMICs Growth Unemployment Inflation [left] [left] [right] Average in AFR São Tomé and Principe Macro-Fiscal Context and Health Financing Factsheet 1C. Fiscal Indicators, 2000-2010 2C. Fiscal Indicators, Average 2012-2017 (proj.) 200 400 60 300 100 40 % GDP % GDP % GDP 200 20 0 100 0 -100 Debt Deï¬?cit Spending Revenue 0 1995 2000 2005 2010 São Tomé and Principe Year Average in LMICs Debt Deï¬?cit Spending Revenue [left] [right] [right] [right] Average in AFR 1D. Sources of Revenue, 1995-2010 2D. Sources of Revenue, 2010 10 % GDP % GDP 5 0 Income tax Other taxes Grants & other revenue São Tomé and Principe 1995 2000 2005 2010 Year Average in LMICs Income Other Taxes Grants & Other Revenue Average in AFR Definition of Macro Fiscal Health Indicators The   14   indicators   describe   a   country’s   macro-­â€?fiscal   environment   to   identify   constraints   or   opportunities   for   health   systems   financing.   For   each   indicator   two   aspects   are   important:   level   and   trend.   A   country   with   a   10   percent   unemployment   rate   that   has   fallen   from   15   percent   may   be   in   better   shape   than   one   with   an   8   percent   unemployment   rate   that   has   risen   from   4   percent.   It   is   also   important   to   benchmark   to   group   averages  of  countries  in  the  same  Word  Bank  (WB)  region  (EAS,  ECS,  LCN,  MEA,  NAC,  SAS,  or  SSF)  and  income  group  (HIC,  Upper  MIC,  Lower   MIC,  or  LIC).     Indicator Source Definition How to interpret for fiscal space for health? Health Financing Indicators The sum of public and private health expenditure, which covers provision of health services (preventive 1. Total health expenditure World Health and curative), family planning activities, nutrition (THE as % GDP) Organization activities, and emergency aid designated for health (WHO) but does not include provision of water and sanitation (ratios in nominal LCUs). Consists of recurrent and capital spending from Health financing indicators reflect not only the 2. Government health WHO government (central and local) budgets, external share of resources devoted to health, but also spending (GHE as % borrowings and grants, and social health insurance the role of the government in the health sector THE) funds (ratios in nominal LCUs). in terms of financing, provision, or regulation. General government health spending as share of 3. Government health WHO general government spending (GGS) (ratios in spending (GHE as % nominal LCUs).   GGS) The direct outlay of households including gratuities 4. Out of pocket spending WHO and in-kind payments to health practitioners, (OOP as % THE) suppliers of pharmaceuticals, and other goods and services whose primary intent is to improve health status (ratios in nominal LCUs). Macroeconomic Indicators Growth is the most important macroeconomic 5. Growth (GDP, constant International Growth is the rate of change of a nation’s GDP from indicator. Additional fiscal space for health can prices) Monetary one year to another. be generated through economic growth without Fund (IMF) altering government spending priorities. Persistent high unemployment is also evidence Unemployment is the rate of unemployed workers of of structural problems in the economy. High the total labor force. Unemployed workers are rates of unemployment also may affect fiscal 6. Unemployment (rate) IMF currently not working but are willing and able to work space for health if a large share of government for pay, currently available to work, and have actively health resources come from searched for work. employer/employee contributions through payroll taxes. 7. Inflation (end of period IMF Inflation is the rate at which general level of prices for High levels of inflation can indicate structural consumer prices) goods and services are rising. problems and macroeconomic instability. Debt, Deficits, and Spending Indicators General government gross includes debt liabilities in SDRs, currency and deposits, debt securities, loans, 8. Gross Debt (as % of IMF insurance, pensions and standardized guarantee GDP) schemes, and other accounts payable. Equity and investment fund shares and financial derivatives and employee stock options are not included. General government net lending or borrowing is In the medium to long run, the level of debt is revenue minus total expenditure—it is the extent to the most important indicator of fiscal solvency, 9. Deficit (as % of GDP) IMF which general government is putting in or utilizing the and the deficit provides information on whether financial resources generated by other sectors and the debt level is under control or being brought non-residents. under control. The level of spending reflects Total expenditure is the total expense and the net choices about the role of government in the 10. Spending (as % of IMF acquisition of nonfinancial assets. It accounts for economy. These choices should be constantly GDP) disposals of nonfinancial assets. reviewed. Revenue consists of taxes, social contributions, 11. Revenues (as % of IMF grants receivable, and other revenue. Revenue GDP) increases government’s net worth, which is the difference between its assets and liabilities. Revenue Composition 12. Taxes on income, WB/IMF Tax payments on personal and corporate income and profits, and capital gains capital gains. The cost of raising revenues, in terms of the (% GDP) excess burden, generally differs by the source 13. Other taxes (% GDP) WB/IMF Other forms of tax payments, including taxes on of revenue. international trade, VAT, and other excise taxes. 14. Non-tax revenue (% WB/IMF Other forms of revenue, including grants. GDP) Data  is  from  November  2012.  Gross  National  Income  (GNI)  is  based  on  the  Atlas  method  (current  US  $).   Â